ESLC Profile: Waste Management

This article is part of a series profiling members of SAFE’s Energy Security Leadership Council (ESLC),a group of business and former military leaders committed to reducing the United States’ dependence on oil.

Waste Management, headquartered in Houston, has been an industry leader in transitioning to alternative sources of fuel. Its fleet—one of the biggest in North America with 18,500 vehicles—includes an increasing number of vehicles that run on petroleum alternatives including compressed natural gas (CNG) and other renewable transportation fuels. Currently, it is investing in further expanding its fleet of trucks that runs on CNG and renewable natural gas along with building more refueling stations. In fact, the company is in the process of using new trucks with near zero emissions—effectively reducing emissions of NOx by 95 percent and greenhouse gas emissions by over 80 percent when combined with renewable natural gas fuel.

Waste Management’s fleet—one of the biggest in North America with 18,500 vehicles—includes an increasing number of vehicles that run on petroleum alternatives including compressed natural gas (CNG) and other renewable transportation fuels.

Waste Management joined SAFE’s ESLC in 2007, taking up the issues of petroleum dependence and energy security when the company was planning how it would reduce its greenhouse gas footprint. At the same time, the U.S. was spending billions of dollars on wars in the Middle East that were directly connected to oil. Waste Management aligned with SAFE’s goals of bolstering domestic oil and gas supplies and reducing dependence on petroleum in the transportation sector for national security reasons.

“We realized that we as a country needed to get away from the dynamic of relying on oil from overseas,” Kerry Kelly, Senior Director of Federal Affairs at Waste Management, told The Fuse. “It’s important for public policy to steer us toward relying on domestic fuels and creating efficiencies.”

She added: “SAFE provided a broad public policy framework to link ongoing efforts to reducing oil dependence to the passion of our existing board members.”

The company’s philosophy of reducing petroleum use for national security and environmental reasons has also helped it cut costs. Besides cutting emissions, the company’s use of CNG has produced concrete cost savings over time. Natural gas is less expensive and more stable in price and supply than diesel fuel. Maintenance costs are also low and the trucks are quieter, which its drivers and customers like.

The company’s philosophy of reducing petroleum use for national security and environmental reasons has also helped it cut costs.

Of Waste Management’s 17,000 trucks, some 6,600 consume natural gas, and 90 percent of its annual newly purchased trucks run on natural gas, highlighting the company’s aggressive push to reduce both costs and emissions with alternatives. In recent years, the company has utilized renewable natural gas—converting landfill gas into fuel for its fleet—as a way of producing credits through the Renewable Fuel Standard (RFS) to sell to other companies so they can comply.

Kelly highlighted how important public policy is for reducing oil demand and promoting alternatives. “We’d hate to see public policy take a step back with renewable fuels,” she said. “It’s where the growth is in domestic energy.”

Other companies that use heavy-duty trucks are following Waste Management’s example, evolving from using diesel to natural gas. This trend could have profound effects on petroleum dependence given that diesel demand is expected to continue to rise for the next couple of decades due to use in the heavy-duty sector. Waste Management estimates that for every diesel truck replaced with natural gas, it cuts consumption of diesel by an average of 8,000 gallons per year while reducing greenhouse gas emissions by 14 metric tons per year.

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The Fuse is an energy news and analysis site supported by Securing America’s Future Energy. The views expressed here are those of individual contributors and do not necessarily represent the views of the organization.

Issues in Focus

Safety Standards for Crude-By-Rail Shipments

A series of accidents in North America in recent years have raised concerns regarding rail shipments of crude oil. Fatal accidents in Lynchburg, Virginia, Lac-Megantic, Quebec, Fayette County, West Virginia, and (most recently) Culbertson, Montana have prompted public outcry and regulatory scrutiny.

2014 saw an all-time record of 144 oil train incidents in the U.S.—up from just one in 2009—causing a total of more than $7 million in damage.

The spate of crude-by-rail accidents has emerged from the confluence of three factors. First is the massive increase in oil movements by rail, which has increased more than three-fold since 2010. Second is the inadequate safety features of DOT-111 cars, particularly those constructed prior to 2011, which account for roughly 70 percent of tank cars on U.S. railroads. Third is the high volatility of oil produced from the Bakken and other shale formations, which makes this crude more prone towards combustion.

Of these three, rail car safety standards is the factor over which regulators can exert the most control. After months of regulatory review, on May 1, 2015, the White House and the Department of Transportation unveiled the new safety standards. The announcement also coincided with new tank car standards in Canada—a critical move, since many crude by rail shipments cross the U.S.-Canadian border. In the words DOT, the new rule:

Since the rule was announced, Republicans in Congress sought to roll back the provision calling for an advanced breaking system, following concerns from the rail industry that such an upgrade would be unnecessary and could cost billions of dollars. The advanced braking systems are required to be in place by 2021.

Democrats in Congress have argued that the new rules are insufficient to mitigate the danger. Senator Maria Cantwell (D-WA) and Senator Tammy Baldwin (D-WI) both issued statements arguing that the rules were insufficient and the timelines for safety improvements were too long.

The current industry standard car, the CPC-1232, came into usage in October 2011. These cars have half inch thick shells (marginally thicker than the DOT-111 7/16 inch shells) and advanced valves that are more resilient in the event of an accident. However, these newer cars were involved in the derailments and explosions in Virginia and West Virginia within the past year, raising questions about the validity of replacing only the DOT-111s manufactured before 2011.

Before the rule was finalized, early reports indicated that the rule submitted to the White House by the Department of Transportation has proposed a two-stage phase-out of the current fleet of railcars, focusing first on the pre-2011 cars, then the current standard CPC-1232 cars. In the final rule, DOT mandated a more aggressive timeline for retrofitting the CPC-1232 cars, imposing a deadline of April 1, 2020 for non-jacketed cars.

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DataSpotlight

The recent oil production boom in the United States, while astounding, has created a misleading narrative that the United States is no longer dependent on oil imports. Reports of surging domestic production, calls for relaxation of the crude oil export ban, labels of “Saudi America,” and the recent collapse in oil prices have created a perception that the United States has more oil than it knows what to do with.

This view is misguided. While some forecasts project that the United States could become a self-sufficient oil producer within the next decade, this remains a distant prospect. According to the April 2015 Short Term Energy Outlook, total U.S. crude oil production averaged an estimated 9.3 million barrels per day in March, while total oil demand in the country is over 19 million barrels per day.

This graphic helps illustrate the regional variations in crude oil supply and demand. North America, Europe, and Asia all run significant production deficits, with the Middle East, Africa, Latin America, and Former Soviet Union are global engines of crude oil supply.